Estate planning - what type of trust?

[Anonymous]

The attorney we met with recommends a testamentary trust for our kids. She didn't mention a living trust but now I'm second guessing. Should we have a living trust instead? Estate is currently worth about $2.5m (mostly retirement, home equity and life insurance). Kids are minors.

What did you do?

[Anonymous]

We have both a revocable and irrevocable trust (we each have one of each). But you should ask your lawyer questions, not ask random people what they have, as it is not applicable to your situation.

[Anonymous]

Anonymous wrote:We have both a revocable and irrevocable trust (we each have one of each). But you should ask your lawyer questions, not ask random people what they have, as it is not applicable to your situation.

We also have a testamentary in case we miss anything.

[Anonymous]

No trusts, just wills and proper POD or beneficiaries on all eligible accounts.

Most people don't need trusts.

[Anonymous]

OP here. I did ask the lawyer and he did not think we needed a trust, however after our meeting I realized there were many questions I didn't ask, and he didn't explain why we didn't need a trust (beyond avoiding taxes). So rather than incurring an expensive hourly rate I'm trying to do some research prior to asking more questions of the lawyer.

It seems that avoiding probate is another issue we didn't talk about, and a living trust would do that. Would that be a reason to have one?

[Anonymous]

Let's start with the question of where you reside?

[Anonymous]

Anonymous wrote:It seems that avoiding probate is another issue we didn't talk about, and a living trust would do that. Would that be a reason to have one?

That's usually the #1 reason that attorneys will give you, but unless you have a particularly complicated estate, it is really not necessary. I've taken several estates through probate in different jurisdictions as an executor (and not an attorney), and it is really not that big of a deal. My legal fees for a local estate attorney were much less than what the deceased would have paid for establishing and maintaining trusts.

[Anonymous]

Honestly, you shouldn't be paying an hourly rate for an estate attorney. This is an area of law where all the basic documents should be done for a fixed fee. If you have some additional complicated issues, those could be charged at an hourly rate, but I think it is a red flag if a lawyer is charging you hourly for the essential estate documents. The amount of money you have doesn't make the documents any more complex, it just makes the tax issues more complicated.

We have a lot of assets (millions) and minor children. Our lawyer is setting up both revocable (while we are living) and irrevocable trusts (for the kids in the event of our death). One of the benefits of a trust is that it keeps your finances out of probate and the public eye. Wills go through probate and all the information is publicly available. Trusts ensure privacy to your personal business.

[Anonymous]

It sounds like almost all of your assets would would be TOD anyway. Ask the lawyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It seems that avoiding probate is another issue we didn't talk about, and a living trust would do that. Would that be a reason to have one?

That's usually the #1 reason that attorneys will give you, but unless you have a particularly complicated estate, it is really not necessary. I've taken several estates through probate in different jurisdictions as an executor (and not an attorney), and it is really not that big of a deal. My legal fees for a local estate attorney were much less than what the deceased would have paid for establishing and maintaining trusts.

We have a trust to maintain privacy/avoid probate - so no one will be able to know who inherits and how much is being inherited. Howver, the size of the estate is well above 2.5 m. I believe that was the main consideration.

[Anonymous]

Anonymous wrote:No trusts, just wills and proper POD or beneficiaries on all eligible accounts.

Most people don't need trusts.

You do if you die and have minor children.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No trusts, just wills and proper POD or beneficiaries on all eligible accounts.

Most people don't need trusts.

You do if you die and have minor children.

That is not true. Without a trust, the will goes through probate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No trusts, just wills and proper POD or beneficiaries on all eligible accounts.

Most people don't need trusts.

You do if you die and have minor children.

That is not true. Without a trust, the will goes through probate.

What's not true?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It seems that avoiding probate is another issue we didn't talk about, and a living trust would do that. Would that be a reason to have one?

That's usually the #1 reason that attorneys will give you, but unless you have a particularly complicated estate, it is really not necessary. I've taken several estates through probate in different jurisdictions as an executor (and not an attorney), and it is really not that big of a deal. My legal fees for a local estate attorney were much less than what the deceased would have paid for establishing and maintaining trusts.

We have a trust to maintain privacy/avoid probate - so no one will be able to know who inherits and how much is being inherited. Howver, the size of the estate is well above 2.5 m. I believe that was the main consideration.

OP here, actually, he did explain the benefits of avoiding probate being public. I'm not concerned about that at this point. The part I forgot to ask about was mute the convenience of avoiding probate for my heirs. Is it worth it to set up a living trust just to make it easier on the kids? We'll definitely have a testamentary trust to make sure the money is looked after for them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No trusts, just wills and proper POD or beneficiaries on all eligible accounts.

Most people don't need trusts.

You do if you die and have minor children.

AFAIK, If you don't set up trusts, your children will get all their money when they turn 18. Our trust gives them a portion of the money when they hit a certain age. I'm not an expert - would someone who knows to comment on my statement.